Industry Spotlight: Aviation

Why do economy watchers follow the aviation industry so closely? Airline stock prices, changes to the c-suite for major carriers, and union negotiations are often featured in nightly business reports. The reason? The aviation industry is tied to many aspects of the overall economy, particularly employment and GDP. Air transport has been and is expected to remain a fast and sustainably growing industry in years to come. In the working paper “The Effects of Terror on International Air Passenger Transport: An Empirical Investigation” by Devashish Mitra, Cong S. Pham, and Subhayu Bandyopadhyay, the authors break down the size and scope of the aviation industry.

A few quick facts:

In 2015, approximately 3.57 billion passengers worldwide were transported by air.

Nearly 63 million jobs are supported through direct ties to aviation or associated tourism.

Aviation generates about $664 billion worth of value added per year, which is comparable to being ranked as the 21st country in the world in terms of GDP. The aviation industry’s global economic impact (direct and indirect) in 2008 was estimated to be $3,560 billion, equivalent to 7.5% of that year’s world GDP.1

Aviation indirectly helps sustain an estimated $2.4 trillion in economic activity, and these figures will more than double in 20 years’ time (IATA, 2015).

According to the forecast by the International Civil Aviation Organization (ICAO), annual growth in international air traffic for 2008-2027 will be about 5% globally.2

One of the air transport industry’s most important contributions is its role in facilitating the growth of other industries. For example, air passenger transport is of critical importance for the growth of tourism because more than 40% of international tourists travel.3

For more information about the aviation industry, read the Working Paper here.